Sharp was born in Camberwell, London, and was educated at Uppingham, but left at 15 and was privately coached for the University of Cambridge, where he rowed in the Clare College boat and graduated B.A. in 1882.
Sharp decided to immigrate to Australia on his father's suggestion. He arrived in Adelaide in November 1882 and early in 1883 obtained a position as a clerk in the Commercial Bank of South Australia. He read some law, and in April 1884 became an associate to the chief justice, Sir Samuel James Way. He held this position until 1889 when he resigned and gave his whole time to music. He had become assistant organist at St Peter's cathedral soon after he arrived, and had been conductor of the government house choral society and the cathedral choral society. Later on he became conductor of the Adelaide Philharmonic, and in 1889 entered into partnership with I. G. Reimann as joint director of the Adelaide school of music. He was very successful as a lecturer but about the middle of 1891 the partnership was dissolved. The school was continued under Reimann, and in 1898 developed into the Elder conservatorium of music in connection with the university. Sharp had made many friends and an address with over 300 signatures asked him to continue his work at Adelaide, but he decided to return to England and arrived there in January 1892. During his stay in Adelaide he composed the music for two light operas, Sylvia, which was produced at the Theatre Royal Adelaide, on 4 December 1890, and The Jonquil. The libretto in each case was written by Guy Boothby. He also wrote the music for some nursery rhymes which were sung by the cathedral choral society.
In 1892 Sharp returned to England and on 22 August 1893 at East Clevedon, Somerset, he married Constance Dorothea Birch, also a music lover. They had three daughters and a son. Also in 1893 he was taken on as a music teacher by Ludgrove School, a preparatory school then in North London. During his seventeen years in the post, he took on a number of other musical jobs.
From 1896 Sharp was Principal of the Hampstead Conservatoire of Music, a half-time post which provided a house. In July 1905 he resigned from this post after a prolonged dispute about payment and his right to take on students for extra tuition. He had to leave the Principal's house, and apart from his position at Ludgrove his income was henceforth derived largely from lecturing and publishing on folk music.
Sharp taught and composed music. Because music pedagogy of his time originated from Germany and was entirely based on tunes from German folk music, Sharp, as a music teacher, became interested in the vocal and instrumental (dance) folk music of the British Isles, especially the tunes. He felt that speakers of English (and the other languages spoken in Britain and Ireland) ought to become acquainted with the patrimony of melodic expression that had grown up in the various regions there. Sharp became interested in traditional English dance when he saw a group of morris dancers with their concertina player William Kimber at the village of Headington Quarry, just outside of Oxford, at Christmas 1899. At this time, morris dancing was almost extinct, and the interest generated by Sharp's notations kept the tradition alive.
The revival of the morris dances started when Mary Neal, the organiser of the Esperance Girls' Club in London, used Sharp's (then unpublished) notations to teach the traditional dances to the club's members in 1905. Their enthusiasm for the dances persuaded Sharp to publish his notations in the form of his Morris Books, starting in 1907.
Between 1911 and 1913 Sharp published a three-volume work, The Sword Dances of Northern England, which described the obscure and near-extinct Rapper sword dance of Northumbria and Long Sword dance of Yorkshire. This led to the revival of both traditions in their home areas, and later elsewhere.
At a time when state-sponsored mass public schooling was in its infancy, Sharp published song books intended for use by teachers and children in the then-being-formulated music curriculum. These song books often included arrangements of songs he had collected with piano accompaniment composed by Sharp himself, arrangements intended for choral singing. Although it has been alleged that, had they heard them, traditional singers (who in England virtually always sang unaccompanied) might well have found Sharp's piano parts distracting, the arrangements with piano accompaniment did help Sharp in his goal of disseminating the sound of English folk melodies to children in schools, thus acquainting them with their national musical heritage.
The schools project also explains Sharp's bowdlerisation of some of the song texts, which, at least among English folk songs, often contained erotic double entendres, when not outright bawdy and or violent. However, Sharp did accurately note such lyrics in his field notebooks, which, given the prudery of the Victorian era could never have been openly published, thus preserving them for posterity. An example of the transformation of a formerly erotic song into one suitable for all audiences is the well-known "The Keeper."
In 1911 Sharp founded the English Folk Dance Society, which promoted the traditional dances through workshops held nationwide, and which later merged with the Folk Song Society in 1932 to form the English Folk Dance and Song Society (EFDSS). The current London headquarters of the EFDSS is named Cecil Sharp House in his honour.
Sharp's work coincided with a period of nationalism in classical music, the idea being to reinvigorate and give distinctiveness to English classical composition by grounding it in the characteristic melodic patterns and recognisable tone intervals and ornaments of its national folk music. Among the composers who took up this goal was Ralph Vaughan Williams, who carried out his own field work in folk song in Norfolk. The use of folk songs and dance melodies and motifs in classical music to inject vitality and excitement, is of course as old as "La Folia" and Marin Marais' "Bells of St. Genevieve" ("Sonnerie de Ste-Geneviève du Mont-de-Paris"), but the attempt to give music a sense of place was novel to the Historical particularism of late nineteenth century Romanticism.
During the years of the First World War, Sharp found it difficult to support himself through his customary efforts at lecturing and writing, and decided to make an extended visit to the United States. The visit, made with his collaborator Maud Karpeles during the years 1916–1918, was a great success. Large audiences came to hear Sharp lecture about folk music, and Sharp also took the opportunity to do field work on English folk songs that had survived in the more remote regions of southern Appalachia, pursuing a line of research pioneered by Olive Dame Campbell. Travelling through the mountains of Virginia, North Carolina, Kentucky, and Tennessee, Sharp and Karpeles recorded a treasure trove of folk songs, many using the pentatonic scale and many in versions quite different from those Sharp had collected in rural England. Generally, Sharp recorded the tunes, while Karpeles was responsible for the words.
Sharp was greatly struck by the dignity, courtesy, and natural grace of the people who welcomed him and Karpeles in the Appalachians, and he defended their values and their way of life in print.
Sharp's work in promoting English folk song dance traditions in the US is carried on by the Country Dance and Song Society (CDSS).